14 October 2009
We are in manufacturing industry of automobiles, for us our suppliers manufactureing the tools to supply the inputs on boughtout basis. We will make the full payment on tools when the compeltion of tool process. 1) The tools are lying at vendor end. 2) Vendor have raised the excise invoice without moving the tool and we have made the payment based on the vendor invoice and also we availed the cenvat credit
What is the procedure to be adopted for the above issue?.
anybody have facing this kind of issue pl clarify.
23 November 2009
The correct procedure is not to pay excise duty at first place itself as this is exempted vide notification no. 67/95-CE, if the goods (capital goods included) manufactured in a factory are being used for manufacturing of excisable goods within the factory are exempted from payment of excise duty.
The supplier should raise invoice without charging excise duty on tools. Only sales tax has to be paid.
Further you can not take credit without receiving goods in your factory at all.
CAclubindia
